Insurance Lobby Reiterates Support for SEC’s Regulation Best Interest

March 4, 2019

As the SEC works through its proposed Regulation Best Interest, opponents and supporters of the rule are becoming more vocal. Most recently, an insurance trade group defended its support of the proposed rule in light of attacks on the rule from state securities regulators, according to news reports.

Earlier this month, the North American Securities Administrators Association said the SEC’s current proposal to overhaul advisor and broker conduct doesn’t go far enough to protect investors.

As evidence, the state securities regulators pointed to the support the SEC’s rule has received from financial industry trade groups that “fought tooth and nail to overturn” the Department of Labor’s fiduciary rule. The Obama-era DOL rule, which purported to require retirement account advisors to put clients’ interests first, was killed in the courts last spring.

Among such anti-DOL rule groups is the American Council of Life Insurers, ThinkAdvisor writes. The ACLI, after all, was one of several industry groups that filed lawsuits against the DOL’s fiduciary rule in 2016.

But the insurer trade group says NASAA is misrepresenting what it suggests is its pro-consumer stance, according to the publication.

The ACLI says the SEC’s proposed rule means “significant additional consumer protections to current law and tighter restrictions on financial professionals,” according to ThinkAdvisor. The DOL’s fiduciary rule, meanwhile, had “a chilling effect on the availability of retirement information to middle-income Americans,” ACLI says, according to the publication.

“If a federal court hadn’t stopped the flawed regulation, as many as four million middle-income families would have lost access to information about annuities unless they paid an annual fee for it,” the group says, according to ThinkAdvisor.

Meanwhile, a ranking member of the Senate Banking Committee has raised concerns about the SEC’s proposal, according to InvestmentNews.

Sen. Sherrod Brown, D-Ohio, has pointed to a recent comment letter from 11 former SEC economists that slammed the proposal as “weak and incomplete,” the publication writes.

"That warning should be a red flag for this committee, and we should call on the SEC to explain,” Brown, who’s a potential Democratic presidential candidate, said at a committee hearing last week.